Section 23
Liquidation of prohibited transactions by finance companies
Any company which, before 1 st August 1973, being the date of the coming into operation of this Act, had entered into any transaction prohibited by the provisions of sections 18, 19, 20, 21 and 22 shall, if it is licensed under this Act -
(a)
within 6 months of that date, submit a statement of those transactions to the Authority; and
(b)
furthermore within that time, or such further time as the
Authority may specify, liquidate those transactions or failing liquidation of those transactions be subject to the restrictions specified in sections 18, 19,20,21 and 22 and be bound accordingly to dispose of any movable or immovable property. or any right. title or interest therein as may have been acquired as a result of those prohibited transactions.
Prohibition of credit facilities to director and officer 23A. (I) Unless exempted by the Authority in writing with or without conditions, or except as provided under subsection (2) or (3), no finance company shall give any credit facility to -
(a)
any of its directors or officers or any other person receiving remuneration from it (other than any accountant, advocate, architect, estate agent, doctor and any other person receiving remuneration from it in respect of his professional services);
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Finance Companies
(b)
any body corporate or unincorporate, firm or sole proprietorship, in which any of its directors or officers is a director or manager, or for which any of its directors or oficers is a guarantor or a an agent;
(c)
any company in which any of its directors or officers has any interest in the shares of that company; or
(d)
any person for whom any of its directors or officers has given any guarantee or other undertaking whatsoever involving financial liability.
(2)
A finance company may give to any of its officers or its executive director -
(a)
any credit facility which is provided for under his scheme of service; or
(b)
where there is no such provision and the finance company is satisfied that special or compassionate circumstances exist, a credit facility not exceeding at any one time -
(i)
6 months' remuneration of that officer or executive director; or
(ii)
his remuneration for such longer period as may be approved by the Authority, and subject to such other terms and conditions as the finance company thinks fit.
(3)
The provisions of -
(a)
subsection (l)(a) does not apply to the giving of any credit facility to the spouse, child or parent of an officer, including an executive director, of that finance company for the purchase of a residence; and
(b)
subsection (l)(c) does not apply to the giving of any credit facility by a finance company to a company in which none of the directors or officers of that finance company has any material interest in the shares of that company.
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Finance Companies
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(4)
In this section -
(a)
"director" or "officer?' includes a spouse, child or parent of that director or officer; and
(3)
the Authority shall specify what constitutes a material interest in the shares of a company.
Disclosure of interest by directors 23B. (I) Every director of a finance company who has in any manner, whether directly or indirectly, any interest in an advance. loan or credit facility or proposed advance, loan or credit facility from that finance company shall as soon as practicable declare in writing the nature of that interest to the board of directors, and the secretary of that finance company or other officer appointed by it for that purpose shall cause a copy of such declaration to be circulated forthwith to all directors.
(2)
The requirements of subsection (1) do not apply where -
(a)
the interest of any director consists only of being a director, officer or member of a body corporate or unincorporate. or a director or officer of a sole proprietorship or a firm which is interested in an advance, loan or credit facility or proposed advance, loan or credit facility from that finance company; and
(b)
the interest of the director may be regarded as trivial.
(3)
For the purposes of subsection (I), a general notice given to the
Board of Directors of a finance company by a director to the effect that he is a director, an officer or member of the body corporate or unincorporate, or a director or officer of the sole proprietorship or the firm to which the credit facility is given or proposed to be given shall be a sufficient declaration of interest in relation to such credit facility or proposed credit facility if -
(a)
it specifies the nature and extent of his interest in the body corporate or unincorporated, sole proprietorship or firm;
(b)
his interest is not different in nature or greater in extent than the nature and extent so specified in the notice at the time any advance, loan or credit facility is made; and
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Finance Companies
(c)
it is given at the meeting of Board of Directors or the director takes reasonable steps to ensure that it is brought up and read at the next meeting of Board of Directors after it has been served on a each of the directors.
(4)
Every director of a finance company who holds any office or possesses any property whereby. directly or indirectly, duties or interest might be created in conflict with his duties or interest as a director of that finance company, shall declare at a meeting of Board of Directors of that finance company the fact of his holding such office or possessing such property and the nature character and extent of the conflict.
(5)
The declaration referred to in subsection (4) shall be made at the first meeting of the directors held -
(a)
after he became a director of the finance company; or
(b)
if already a director, after he commenced to hold that office or to possess that property.
(6)
The secretary of the finance company or its other officer referred to in subsection (1) shall record any declaration made under this section in the minutes of the meeting at which it was made or at which it was brought up and read.
(7)
Any director who contravenes subsection (1) or (4) is guilty of an offence and liable on conviction to a fine not exceeding $50,000 and imprisonment for a term not exceeding 3 years or both.